‘Tough year’ for 2018 budget at WhidbeyHealth

Unplanned expenses in 2018 led to a “tough year” for WhidbeyHealth, board commissioners learned at Monday’s monthly meeting.

“We lost about $6.3 million this fiscal year,” Ron Telles, chief financial officer said during the review of 2018 revenue and expenses.

“But we expect to break even next year,” he said, referring to 2019.

The losses occurred in the category of non-cash operating expenses, Telles said, and not the day-to-day cash operation expenses that pay for salaries, supplies, purchases and services, physicians fees, utilities and other needs.

One large budget-buster was being forced to contract out for chemotherapy drugs instead of making the drugs in house because the medical center’s pharmacy equipment had been deemed inadequate during an inspection. This led to $300,000 in unanticipated monthly costs because outsourcing pharmacy drugs is much more expensive.

A new pharmacy has since been built; it includes top-of-the-line ventilation and safety systems.

Patient revenue in 2018 added up to $102 million, 2 percent less than had been budgeted. With the addition of tax levy money and other revenue, 2018 total net operation revenue for WhidbeyHealth was $108.7 million.

Total net operating cash expenses were $108.6 million.

The health system had recorded positive cash flow the past few years. In 2016, WhidbeyHealth ended up with a 1.3-percent operating surplus budget, after years of losing money.

The number of surgeries has been declining while clinic visits and visits to the emergency department remain steady, Telles told the five-member board of commissioners that oversees Whidbey Island Public Hospital District, which includes the medical center and seven clinics.

On average every day, 60 to 65 patients are seen in the emergency room.

In December, the health system’s clinics were affected by the island-wide wind storm and power outage that kept patients from keeping appointments and forced some clinics to close.

Fewer patients are scheduling surgeries, leading to decreased revenue in that category.

“The trend in surgeries is significantly dropping,” Telles pointed out. “It’s the lowest I’ve seen in two years.”

Scheduling of certain procedures, such as MRI scans, has also steadily declined. A chart comparing data over a five-year period showed more than 3,200 MRI scans completed in 2014 compared to slightly above 2,400 completed in 2018.

The collections department did increase its number of days of cash on hand, which is on indication of the number of days that an organization can continue to pay its operating expenses with the amount of cash available.

It had been below 25 days on Sept. 18 but rebounded to 36 days cash on hand three months later; having at least 30 days cash on hand is the goal.